Innovation & Entrepreneurship

Hiring the first employee(s): A story of entrepreneurship and human capital

In contrast to employee qualifications, there is no clear evidence that entrepreneurs’ formal qualifications positively affect their income.

But how can entrepreneurs benefit from their degrees? In a recently published study with my co-authors Elisabeth Bublitz Kristian Nielsen, and Bram Timmermans, we propose that entrepreneurs can benefit from using their qualification as a signal during the process of recruiting employees.

In this study, we use detailed labor market data from Denmark and Germany and identify a process of matching equals among equals for highly skilled employees. Overall, our study indicates that founders’ qualifications are the most reliable predictor of recruitment choices over time.